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<DIV><FONT face=Arial size=2>No. 96-55456. - PREMO v. MARTIN - US 9th
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<DIV> </DIV>
<DIV><FONT face=Arial size=2>United States Court of Appeals,Ninth
Circuit.<BR>Reset<BR>A<BR>A Font size:<BR>Print<BR>ShareThis</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>PREMO v. MARTIN</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Brenda PREMO, Director of the Department of
Rehabilitation, State of California, Plaintiff-Appellant, v. Jeana MARTIN; ?The
United States Department of<BR>Education; ?Richard W. Riley, Secretary of the
United States Department of Education, Defendants-Appellees.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>No. 96-55456.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Argued and Submitted June 9, 1997. -- July 11,
1997<BR>Before: ?GOODWIN, D.W. NELSON, and TROTT, Circuit Judges.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>James F. Ahern, Deputy Attorney General of the
State of California, for plaintiff-appellant.John F. Daly, Department of
Justice, Washington, DC, for defendants-appellees<BR>the United States
Department of Education and Secretary of Education Richard Riley.Janice A.
Jenkins, Yturbide & Jenkins, San Francisco, CA, for
defendant-appellee<BR>Jeana Martin.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Brenda Premo, in her official capacity as the
Director of the California Department of Rehabilitation (the “State”), appeals
the district court's grant<BR>of summary judgment to Jeana Martin, the United
States Department of Education, and Secretary of Education Richard
Riley. Martin, formerly a blind vendor<BR>licensed under the
Randolph-Sheppard Vending Stand Act (the “Act”), 20 U.S.C. §§ 107-107f, invoked
the arbitration provisions of the Act in order to resolve<BR>a dispute between
herself and the Department of Rehabilitation. An arbitration panel
convened by the United States Department of Education awarded Martin<BR>damages,
injunctive relief, and attorney's fees. The State subsequently
brought suit in federal district court, claiming that the Eleventh
Amendment<BR>prohibits Randolph-Sheppard arbitration panels from awarding
compensatory relief. In the alternative, the State argued that the
arbitration proceedings<BR>violated due process. Martin
counterclaimed, seeking judicial enforcement of the award. The State
responded that the Eleventh Amendment bars the enforcement<BR>of such awards in
federal court. The district court granted Martin's motion for
summary judgment. We have jurisdiction under 28 U.S.C. § 1291,
and<BR>we affirm.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>FACTUAL AND PROCEDURAL BACKGROUND</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>The Randolph-Sheppard Vending Stand Act, 20 U.S.C.
§§ 107-107f, establishes a cooperative federal-state program that provides
employment opportunities for<BR>the blind. The Act grants priority
to blind persons who desire to operate vending facilities on federal
property. 20 U.S.C. § 107(b). At the federal<BR>level, the
Secretary of Education is charged with the overall responsibility for
administering the Act. 20 U.S.C. §§ 107(b), 107a(a).</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>At the state level, state licensing agencies
(“SLAs”) designated by the Secretary of Education implement the program.
20 U.S.C. § 107a(a)(5). State participation<BR>in the program is
voluntary, and a state agency seeking to be designated as a Randolph-Sheppard
SLA must apply to the Secretary of Education and agree<BR>to a number of
conditions. For example, the Act requires SLAs to give preferences
to blind persons in need of employment, 20 U.S.C. § 107a(b), to
negotiate<BR>with federal agencies for the operation of vending facilities on
federal sites, 20 U.S.C. § 107a(c), and to equip the facilities, 20 U.S.C. §
107b(2).<BR> In addition, the state agency must:</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>make application to the Secretary and
agree-</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>·</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>(6) to provide to any blind licensee dissatisfied
with any action arising from the operation or administration of the vending
facility program an opportunity<BR>for a fair hearing, and to agree to submit
the grievances of any blind licensee not otherwise resolved by such hearing to
arbitration as provided in section<BR>107d-1 of this title.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>20 U.S.C. § 107b(6).</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>The facts relevant to this case are not in
dispute. In 1985, the California Department of Rehabilitation, the
designated SLA for the State of California,<BR>issued a license to Jeana
Martin. The license permitted her to operate a snack bar and lunch
room at the General Mail Facility of the United States Post<BR>Office in Santa
Ana, California. Martin left the position in 1991 when she
experienced financial losses and other difficulties. Although she
relocated<BR>to other sites, her financial condition worsened, and the State
revoked her license in 1992.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>During this period, Martin twice requested a state
hearing. In 1990, she filed a complaint alleging that the State had
violated the Act by failing to<BR>take adequate steps to ensure compliance by
the Postal Service. In 1992, she challenged the State's termination
of her vendor's license. In both cases,<BR>Martin was denied
relief.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>To contest these decisions, Martin invoked her
right to arbitration by a panel convened by the Secretary of Education under 20
U.S.C. §§ 107d-1, 107d-2.<BR> Pursuant to the terms of the statute, Martin
selected one panel member, the State selected another, and the panel members
designated by Martin and the<BR>State agreed to a third person who chaired the
panel.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>During the course of the proceedings, the panel
refused a number of the State's requests. First, the panel declined
to grant a continuance to the State's<BR>attorney. When the State
objected to Martin's selection of Robert Humphreys as a panel member because
Humphreys previously had expressed a view about<BR>one of the legal issues
affecting Martin, the panel chair overruled the objection. During
the hearing, the panel admitted, over the State's objection,<BR>the testimony of
Durward McDaniel, an attorney who had previously advised Martin.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>In August of 1994, the panel ruled in favor of
Martin. The panel determined that the State had violated the Act by
refusing to secure the renovation of<BR>the vending facilities at Santa Ana, by
failing to insist on assignment of income from competing vending machines to
Martin, and by declining to take effective<BR>steps to prevent the Postal
Service from renewing a contract with another vendor. Reasoning that
these lapses were the cause of Martin's financial difficulties,<BR>the panel
also concluded that the State had improperly terminated her license.
In December 1994 the panel awarded Martin $379,025.05 in lost income
and<BR>$70,898.65 in attorney's fees and costs. The panel also
ordered the State to reinstate Martin's license, to restore her to a comparable
vending facility,<BR>and to pay her at a rate of $5,731.94 per month until she
is restored.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>The State then filed this federal action, naming
the Secretary of Education, the United States Department of Education (“federal
defendants”), and Martin<BR>as defendants. The State claimed that
the Eleventh Amendment prohibits Randolph-Sheppard arbitration panels from
awarding compensatory relief and bars<BR>the enforcement of such awards in
federal court. In the alternative, the State alleged that the denial
of the continuance, Humphreys' participation as<BR>a panel member, and the
admission of McDaniel's testimony amounted to a violation of due
process. Martin counterclaimed, seeking enforcement of the
arbitral<BR>award. Both the State and Martin filed motions for
summary judgment. The federal defendants did not oppose the State's
motion for summary judgment<BR>on Eleventh Amendment grounds but filed a motion
for partial summary judgment on all other issues.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>The district court granted summary judgment to
Martin, concluding that the State had waived its sovereign immunity.
The court further concluded that no<BR>violation of due process had occurred
because the State is not a “person” within the meaning of the Fifth Amendment,
and that the award was not arbitrary<BR>and capricious. Following
this decision, the State filed a motion to amend its complaint, which the
district court denied. This timely appeal followed.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>STANDARD OF REVIEW</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> The question of Eleventh Amendment immunity
is a purely legal issue that we review de novo. Micomonaco v. Washington,
45 F.3d 316, 319 (9th Cir.1995).</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> An arbitral award under the Randolph-Sheppard
Act is reviewed as an agency action under the standards set forth in the
Administrative Procedure Act (“APA”),<BR>5 U.S.C. § 706. See 20
U.S.C. § 107d-2. Under the APA, agency action may be set aside only
if “arbitrary, capricious, an abuse of discretion, or otherwise<BR>not in
accordance with law.” 5 U.S.C. § 706(2)(A); ?In re Transcon Lines, 89 F.3d
559, 563 (9th Cir.1996).</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> We review a district court's denial of a
motion to amend a complaint for an abuse of discretion. Janicki Logging
Co. v. Mateer, 42 F.3d 561, 563 (9th<BR>Cir.1994).</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>DISCUSSION</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>I. Eleventh Amendment</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>The Eleventh Amendment provides:</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>The Judicial power of the United States shall not
be construed to extend to any suit in law or equity, commenced or prosecuted
against one of the United<BR>States by Citizens of another State, or by Citizens
or Subjects of any Foreign State.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>U.S. Const. amend. XI. Although the
Amendment does not explicitly prohibit an action against a state by one of the
state's own citizens, the Supreme Court<BR>has construed the Amendment as
barring such suits. See Welch v. Texas Dept. of Highways & Pub.
Transp., 483 U.S. 468, 472, 107 S.Ct. 2941, 2945, 97 L.Ed.2d<BR>389 (1987)
(citing Hans v. Louisiana, 134 U.S. 1, 10, 10 S.Ct. 504, 505, 33 L.Ed. 842
(1890)). Even when a state is not a named party, as is the
case<BR>here, the Eleventh Amendment may bar a suit by private parties seeking
to impose a liability which must be paid from public funds in the state
treasury.<BR> Edelman v. Jordan, 415 U.S. 651, 663, 94 S.Ct. 1347, 1355-56,
39 L.Ed.2d 662 (1974). However, there are two well-recognized
exceptions to the Eleventh<BR>Amendment protection from suits for
damages. Congress can abrogate a state's Eleventh Amendment
sovereign immunity without the consent of the state in<BR>certain instances, or
a state can waive its immunity by consenting to suit in federal
court. See Atascadero State Hosp. v. Scanlon, 473 U.S. 234,
238,<BR>105 S.Ct. 3142, 3145, 87 L.Ed.2d 171 (1985).</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> We have not as yet had occasion to consider
the intersection of the Eleventh Amendment and the Randolph-Sheppard Act. Three
other circuit courts have addressed<BR>the issue, with varying
results. See Tennessee Dep't of Human Serv. v. United States Dep't
of Educ., 979 F.2d 1162, 1166-68 (6th Cir.1992) (holding that<BR>Eleventh
Amendment does not apply to arbitration proceedings under Randolph-Sheppard Act
but that it does bar proceedings in federal court to enforce arbitral<BR>awards
of compensatory relief); ?McNabb v. United States Dep't of Educ., 862 F.2d 681,
683-84 (8th Cir.1988) (refusing to enforce compensatory damages<BR>awarded by
Randolph-Sheppard arbitration panel, in per curiam judgment with each judge
writing separately); ?Delaware Dep't of Health & Soc. Servs. v.<BR>United
States Dep't of Educ., 772 F.2d 1123, 1137-38 (3d Cir.1985) (concluding that
states participating in Randolph-Sheppard program have waived their<BR>sovereign
immunity to both arbitration proceedings and federal judicial enforcement of
arbitral awards). As these decisions make clear, a case such
as<BR>this one presents two central questions. First, does the
Eleventh Amendment prevent Randolph-Sheppard arbitration panels from awarding
compensatory relief?<BR> Second, does the Amendment bar the federal courts
from enforcing such awards?</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>The district court relied on Delaware to conclude
that by participating in the Randolph-Sheppard program, the State has waived its
sovereign immunity to<BR>both arbitral awards and federal actions to enforce
such awards. Martin agrees. Citing Tennessee, the
federal defendants take the position that the<BR>Eleventh Amendment does not
limit the authority of Randolph-Sheppard arbitral panels to award compensatory
relief but does bar federal courts from enforcing<BR>such awards.
The State maintains that the Eleventh Amendment limits the authority of both the
arbitral panels and the federal courts to fashion
compensatory<BR>relief.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>We affirm the decision of the district
court. We conclude that the Eleventh Amendment does not apply to
Randolph-Sheppard arbitration proceedings and<BR>thus does not limit the
authority of arbitration panels convened under the Act to award compensatory
relief. In addition, we believe that the overwhelming<BR>implication
of the Act is that participating states have waived their sovereign immunity to
suit in federal court for the enforcement of such awards.<BR>1</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>A. Authority of the Randolph-Sheppard arbitration
panel to award compensatory relief</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> The State's position that the Eleventh
Amendment deprives Randolph-Sheppard arbitration panels of the authority to
award compensatory relief is wholly<BR>unsupported. The text of the
Amendment clearly indicates that it does not apply to arbitration
proceedings. In referring to the “Judicial power of<BR>the United
States,” the Amendment on its face limits only the authority of Article III
courts. See Pennhurst State School & Hosp. v. Halderman, 465
U.S.<BR>89, 98, 104 S.Ct. 900, 906-07, 79 L.Ed.2d 67 (noting that “the
fundamental principle of sovereign immunity” embodied in the Amendment “limits
the grant<BR>of judicial authority in Art. III?”) (emphasis added).
The Amendment does not purport to affect proceedings in tribunals established by
statute. See<BR>Ellis Fischel State Cancer Hosp. v. Marshall, 629
F.2d 563, 567 (8th Cir.1980) (“[A]dministrative action against states pursuant
to individual complaints<BR>does not run afoul of the eleventh
amendment”).</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Of the three circuits to consider the effect of the
Eleventh Amendment on Randolph-Sheppard arbitral proceedings, one has held that
the Amendment does not<BR>apply, and another has clearly indicated its support
for this view. See Tennessee, 979 F.2d at 1167 (“[T]he Eleventh
Amendment does not apply to such<BR>an arbitration panel.”); ?Delaware, 772 F.2d
at 1138 (noting that position that Eleventh Amendment applies to
Randolph-Sheppard arbitration panels is “hardly<BR>supportable by the
text”). The third court that addressed the matter did not decide the
question. See McNabb, 862 F.2d at 683. We follow the
opinion<BR>in Tennessee and conclude that the Eleventh Amendment does not apply
to proceedings before Randolph-Sheppard arbitration panels.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>We note that the parties do not dispute that, as a
matter of statutory construction, the Randolph-Sheppard Act gives arbitration
panels the authority to<BR>award compensatory relief. The Act
provides that states must agree to provide blind licensees “dissatisfied with
any action arising from the operation<BR>or administration of the vending
facility program” with a hearing and to “submit the grievances of any blind
licensee not otherwise resolved by such hearing<BR>to arbitration as provided in
section 107d-1.” 20 U.S.C. § 107b(6) (emphasis added). Section
107d-1(a) further provides that an arbitration panel convened<BR>to resolve a
dispute between a state and a blind vendor “shall be final and binding on the
parties?” (emphasis added).</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>It has been widely recognized that this language
permits arbitration panels to award compensatory relief. See, e.g.,
Tennessee, 979 F.2d at 1165 (“The<BR>natural reading of these provisions is that
the arbitration panel may consider and resolve any complaint of a vendor arising
out of the program, including<BR>a complaint that the state agency has taken
money to which the vendor is entitled.”); ?Delaware, 772 F.2d at 1137 (noting
that “the statutory language<BR>is unambiguous” in allowing compensatory
relief). In drawing this conclusion, courts have emphasized that the
prevailing conception at the time the Act<BR>was passed was that arbitral
resolution of disputes involved awards of back pay and other forms of
compensatory relief. See, e.g., Tennessee, 979 F.2d<BR>at 1165;
?Delaware, 772 F.2d at 1136.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Thus, while it is true that the Act does not refer
expressly to compensatory relief and one circuit judge has concluded that the
Act does not permit such<BR>relief, see McNabb, 862 F.2d at 687, this view has
been largely discredited. Indeed, the federal defendants, who in the
past have argued that the Act<BR>did not permit such relief, now concede that
their prior position was incorrect. Accordingly, we conclude that
the arbitration panel had the authority<BR>to award compensatory relief to
Martin.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>B. Enforcement of compensatory Randolph-Sheppard
arbitral awards in federal court</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> Consent by a state to be subject to judicial
enforcement of a damages award has long been recognized as an exception to
Eleventh Amendment immunity. <BR>See, e.g., Port Authority Trans-Hudson
Corp. v. Feeney, 495 U.S. 299, 304, 308-09, 110 S.Ct. 1868, 1872, 1874-75, 109
L.Ed.2d 264 (1990); ?Atascadero,<BR>473 U.S. at 238, 105 S.Ct. at
3145. A state will be deemed to have waived its sovereign immunity
when (1) the state expressly consents to suit; ?(2)<BR>a state statute or
constitution so provides; ?or (3) Congress clearly intended to condition the
state's participation in a program or activity on the state's<BR>waiver of
immunity. Micomonaco, 45 F.3d at 319. However, waiver will be
found “only where stated by the most express language or by such
overwhelming<BR>implication from the text as [will] leave no room for any other
reasonable construction.” Port Authority, 495 U.S. at 305, 110 S.Ct. at
1873 (alteration<BR>in original) (internal quotations and citations
omitted).<BR>2</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>In this case, the State of California has not
expressly consented to suit. Nor has California enacted a statute
that provides for waiver. The California<BR>statute establishing the
state counterpart to the federal Randolph-Sheppard program does provide that the
decision of an arbitration panel “shall be final<BR>and binding on the parties
except as otherwise provided in the act.” Cal. Welf. & Inst.Code
§ 19635 (West 1991). While this statute clearly
reflects<BR>California's intent to be bound by Randolph-Sheppard arbitral
awards, it does not provide clear enough consent to suit in federal court to
amount to an<BR>express statutory waiver of sovereign immunity. See
Atascadero, 473 U.S. at 241, 105 S.Ct. at 3146-47.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>However, the evidence that Congress conditioned
state participation in the Randolph-Sheppard program on consent to federal
judicial enforcement of compensatory<BR>awards is overwhelming. The
statute explicitly requires participating states to agree to a number of
conditions. Specifically, each state agency “shall<BR>· agree” to
provide any dissatisfied blind vendor with the opportunity for a fair hearing
and “to submit the grievances of any blind licensee not otherwise<BR>resolved by
such hearing to arbitration.” 20 U.S.C. § 107b. The statute
further provides that arbitration “shall be final and binding on the
parties.”<BR> 20 U.S.C. § 107d-1(a) (emphasis added). In
addition, the arbitration decision “shall be subject to appeal and review as a
final agency action for purposes<BR>of chapter 7 of such title 5 [5 U.S.C. §§
701-706 of the APA].” See 20 U.S.C. § 107d-2. The APA provides that
“agency action is subject to judicial review<BR>in civil or criminal proceedings
for judicial enforcement.” 5 U.S.C. § 703. Thus, by requiring
the states to submit to “binding” arbitration, and by<BR>providing for appeal
and review under the APA, the Randolph-Sheppard Act unequivocally guarantees
that arbitration awards will be judicially enforceable.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>We believe that these statutory provisions also
reflect participating states' consent to the enforcement of arbitration awards
in federal court. The Randolph-Sheppard<BR>Act is federal, and an
agency of the federal government, the Department of Education, is charged with
the responsibility of convening arbitration panels<BR>under the Act. It is true,
as the federal defendants point out, that the Act does not specifically
designate federal courts as the proper tribunals for<BR>the enforcement of such
awards. Blind vendors might be able to bring suit in state court to
enforce arbitration awards. Yet the fate of such suits<BR>is
uncertain, as state doctrines of immunity may apply. See Tennessee,
979 F.2d at 1169 n. 4. We do not think that the mere possibility of state
court<BR>enforcement satisfies the statute's command that arbitration must be
binding.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>Under these circumstances, there is no “room for
any other reasonable construction” of the statute. Port Authority, 495
U.S. at 305, 110 S.Ct. at 1873.<BR> The overwhelming implication of the
statute is that by agreeing to participate in the Randolph-Sheppard program,
states have waived their sovereign immunity<BR>to enforcement of such awards in
federal court.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>II. Arbitral Award</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>The State contests the arbitral award on a number
of grounds. All of these arguments are without merit.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>A. Due process and judicial review under the
APA</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> In its federal complaint, the State alleged
that the arbitral proceedings violated due process in several
respects. Because the State is not a “person”<BR>for the purposes of
the Fifth Amendment, the State's reliance on the Due Process Clause was
misplaced. See South Carolina v. Katzenbach, 383 U.S.
301,<BR>323-24, 86 S.Ct. 803, 815-16, 15 L.Ed.2d 769 (1966). The
State should have invoked the judicial review provisions of the APA, which the
Randolph-Sheppard<BR>Act designates as imposing the proper standard for
evaluating an arbitral award. 20 U.S.C. 107d-2(a). Under the
APA, an agency action may be set aside<BR>only if it is “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.
§ 706(2); ?see In re Transcon Lines,<BR>89 F.3d at 563. The district
court evaluated the State's claims under the APA standard and rejected each in
turn. We affirm the district court's decision.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> First, the State contends that the selection
of Humphreys as a panel member was inappropriate because he had written a letter
to State officials in 1990,<BR>at the request of Martin's former
attorney. The State maintains that Humphreys's presence on the panel
created “evident partiality,” in violation of<BR>the Federal Arbitration Act
(“FAA”), 9 U.S.C. § 10(a)(2). Even if the FAA were applicable here,
because Humphreys's prior involvement with Martin was<BR>fully disclosed, the
State has not made the required showing of “actual bias” by “specific facts
which indicate improper motives.” Woods v. Saturn Distribution<BR>Corp.,
78 F.3d 424, 427 (9th Cir.) (quotations and citation omitted) (upholding award
of arbitration panel consisting entirely of employees and authorized<BR>dealers
of one party), cert. dismissed, 518 U.S. 1051, 117 S.Ct. 30, 135 L.Ed.2d 1123
(1996). Moreover, the Randolph-Sheppard Act itself permits at
least<BR>a minimal degree of partiality by allowing each party to select a panel
member. 20 U.S.C. § 107d-2(b)(1). Rather than prohibiting
individuals with pre-existing<BR>relationships from becoming panel members, the
Act instead seeks to neutralize any bias by requiring the parties to agree on a
third panel member, the<BR>chair. Id. Viewed in light of these
provisions, the panel's refusal to disqualify Humphreys was not arbitrary,
capricious or an abuse of discretion.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> Second, the State argues that the panel
abused its discretion by denying the State's request for a 60-day
continuance. Yet there is no evidence that<BR>the denial was
improper. The parties had agreed to the hearing date five months in
advance. In addition, the panel denied the continuance a full
two<BR>months before the scheduled date, leaving the State ample time to
prepare. Accordingly, we conclude that the panel's decision was not
arbitrary, capricious,<BR>or an abuse of discretion.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> The State's third contention, that the panel
improperly admitted the expert testimony of McDaniel, Martin's former lawyer, is
also without merit. McDaniel's<BR>testimony, which concerned the
legal requirements of the Randolph-Sheppard Act, was relevant. The
State had the opportunity to demonstrate any bias McDaniel<BR>may have had on
cross-examination. It was not arbitrary, capricious, or an abuse of
discretion for the panel to admit McDaniel's testimony.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>We affirm the district court's decision that the
arbitration proceedings complied with the APA.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>B. The State's post-judgment motion to amend its
complaint</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2> The State moved to amend its complaint under
Rule 15(a) of the Federal Rules of Civil Procedure after the district court
issued a final judgment in this<BR>case. Because it had improperly
framed its procedural objections to the arbitration as due process challenges,
the State sought to restate its claims<BR>under the APA. In addition, the
proposed amended complaint contained new allegations forming the basis for
additional claims.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>While Rule 15(a) establishes that leave to amend
should be “freely given,” post-judgment motions to amend are treated with
greater skepticism than pre-judgment<BR>motions. See Charles Alan
Wright & Arthur Miller, 6 Federal Practice and Procedure § 1489
(1990). The likelihood that amendment will cause undue delay<BR>in
the proceedings is a legitimate rationale for denying a motion to
amend. See Janicki, 42 F.3d at 566. After a judgment has
been issued, the conclusion<BR>that amendment will cause undue delay is
particularly justified. See id. at 566-67. Here, the
district court treated the State generously, analyzing<BR>its claims under the
proper legal standard even though that standard was not articulated in the
complaint. Moreover, the State had ample opportunity<BR>to file an
amended complaint with new allegations before the court issued its final
judgment. Under these circumstances, it was not an abuse of
discretion<BR>for the court to refuse to allow the State to expand its case
after a final decision had been made.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>CONCLUSION</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>For the foregoing reasons, the judgment of the
district court is AFFIRMED.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>FOOTNOTES</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>1.<BR>The parties do not argue, and we do not
consider, the question of whether Congress abrogated the sovereign immunity of
states participating in the Randolph-Sheppard<BR>program.</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>2.<BR>While the Supreme Court recently has narrowed
the circumstances in which Congress has the authority to abrogate sovereign
immunity, even when Congress's<BR>intent to do so is explicit, the Court's
ruling does not affect the “unremarkable, and completely unrelated” matter of
state waiver. See Seminole Tribe<BR>v. Florida, 517 U.S. 44, ----,
116 S.Ct. 1114, 1128, 134 L.Ed.2d 252 (1996).</FONT></DIV>
<DIV> </DIV>
<DIV><FONT face=Arial size=2>D.W. NELSON, Circuit Judge.</FONT></DIV>
<DIV> </DIV>
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